Wells Fargo senior analyst Marci Ryvicker launched coverage on the stock Monday with an Outperform rating and $17-$19 price target, which suggests more than 100% upside at the high end. The analyst said valuation is compelling.

Ryvicker said Nexstar Broadcasting is one of the best run broadcasters in the industry, with significant leadership in both retransmission consent and digital. She said the latest recapitalization, dividend, enhanced liquidity resulting from the latest equity offering, and a relatively inexpensive valuation (5.8x 2012E/2013E blended EBITDA and 40.2% blended FCF yield versus the sector averages of 6.1x and 31.4%, respectively) should warrant greater attention from the investment community.

The analyst said accretive M&A should add significantly to free cash flow. "NXST has participated in a variety of M&A over the past several months that should result in ~$135MM of incremental revenue and ~$65MM of incremental EBITDA on a PF basis in 2013E," she notes. Most important, the analyst said, is the fact that the deals are accretive at ~5x blended EBITDA.

At year-end 2012, the analyst estiamtes PF leverage ratio likely reach ~4x, the lowest in the company's history. While it may tick up to ~5x in 2013 due to a lack of political and Olympics, it could fall to nearly 3x by 2014, it was noted. "Couple this financial flexibility with $100MM+ annual FCF and we would not be surprised to see incremental capital returns (i.e. increases to the $0.48 dividend)," Ryvicker states.

Ryvicker also said the company is in a favorable net retrans position and said core ad outperformance should continue.

Shares of Nexstar Broadcasting are up 3.7 percent Monday to $9.82 following the bullish call.